The Divorce Hacker's Guide to Untying the Knot: What Every Woman Needs to Know about Finances, Child Custody, Lawyers, and Planning Ahead

Author

Introduction

Not long ago, I was in your shoes. I experienced the demise of my marriage, and it felt as though my life was over. Everything that I had dreamed of came to an abrupt end, and on the worst days, I literally didn’t know how I was going to make it through. I was sick, scared, and felt constantly under attack from my soon-to-be ex-husband and overwhelmed by the divorce proceedings as our marriage unraveled. I didn’t know where to turn.

In time, I learned that life could be better — much, much better. By combining my practical skills as a lawyer and an empowering healing practice, I found a way out of the chaos to take back my power and create a new and better life. In this book, I share what I learned with you, so that you, too, can create the life of your dreams. Divorce does not have to be the end of your life, and it does not have to be an endless, complicated undertaking. It is an opportunity for a new and better life, and I am here to show you how to make that a reality.

The First Essential Truth

Let’s start first with an essential truth: You cannot depend on your husband anymore to look out for your best interests. It is astounding how many women walk through the doors of my legal practice believing that, even as they are going through divorce, their husband can be trusted to do the right thing for them. These women assume that, since they are trying to do the right thing, their husband will do so as well. Every woman I have represented has experienced that aha moment of awareness — that he’s no longer looking out for you. This isn’t man-bashing. There are plenty of good and honest fellows out there. But it is a fact that, during a divorce, the man who once promised to put you first is no longer doing that. The sooner you accept this inconvenient truth, the sooner you will be on your way to regaining your power and building a better life.

Like so many women, I gave up a lot of power to my husband during our marriage. I let him handle the finances and trusted him to look out for the family’s best interest, including mine and that of our three children. In my twenties and thirties, I worked as a litigator at a big corporate law firm, but I gave up my career to raise the kids. My husband — also a lawyer — did very well, and we had a good life. We lived in a beautiful beachside town, belonged to a private country club, and took vacations to Hawaii and ski trips with our friends. After sixteen years of marriage, however, things began to change — and I chose to ignore the signs because I wanted everything to continue just as it was. As things worsened, I did what most women do: took my husband to a marriage counselor, hoped for the best, and let him continue to handle our finances the way he always had.

I want you to know that virtually every woman who has walked through the doors of my office has had some version of this same story: We just didn’t want to see the truth about what was happening, and then one day it was too late. In the legal world this is called willful blindness.

In my case, my willful blindness ended late one Tuesday night in April, a few weeks after our son’s baseball team, coached by my husband, won the Little League championship, and we hosted a wonderful party for all the kids and team parents. Late that Tuesday night, I learned that my marriage was broken beyond repair. After two years in marriage counseling, I finally came to the realization that we could no longer remain married, although I loved him deeply and wanted nothing more than to save our marriage.

I tell this story to let you know that if you are in the same place — going to weekly meetings with a therapist, holding on to the hope of saving your marriage, carrying on life as usual but knowing in your heart that your husband is not fully committed — you are putting yourself and your family at risk. It’s time to pull off the Band-Aid, face the truth, and take proactive steps to protect yourself and move forward. There is a way out, and I will show you how in this book.

The Second Essential Truth

The second essential truth is that you cannot blindly depend on divorce professionals to look out for your best interest. Many lawyers, accountants, and even some therapists make the divorce process a lot more complicated and drawn out than it needs to be. This is no accident, because they get paid by the hour. These people have zero incentive for you to quickly wrap things up and move on with your life. The longer you are tied up with your divorce and the more you fight, the longer and more you will be paying them. A divorce can drag on for years and cost thousands of dollars more than it should while the professionals line their pockets.

Of course, there are divorce professionals with high standards and integrity, and I will show you how to find them. Armed with the knowledge of how the system really works, you will be positioned to know who has your best interests in mind and who doesn’t. The fact is that most divorces are not that complex. If you can make a human in nine months, you can untie the knot in less time.

The Third Essential Truth

The third essential truth is that you cannot rely for advice on Aunt Martha from Chicago who got divorced back in 1983 or on your friend from college whose husband is a patent attorney. Although well intentioned, friends and family members can steer you in the wrong direction, and the unintended consequences can be emotionally and financially devastating.

Who can you trust? Where can you turn? The Divorce Hacker’s Guide to Untying the Knot. In these pages, I show you how to take action so that you can create a new and better life with your sanity intact and your money in the bank. I’ve created a program that works. I offer up the same insider information I deliver to my clients every day: truthful advice about legal, financial, custody, real estate, and career issues, plus compassionate guidance for caring for children, healing emotional wounds, and regaining your power.

Wellness is an essential part of my program for getting through your divorce with your sanity intact, and it is absolutely indispensable to creating a new and better future. My divorce was nastier and messier than Kramer vs. Kramer. In spite of that, I learned how to access the power within in order to move forward and eventually coparent with my ex. If I could do it, I assure you that you can, too. In this book, as I walk through each step in the legal process, I also walk you through some simple yet powerful strategies for healing your emotional wounds, so that when the divorce decree is entered, you are ready to start your new life from a place of strength and self-worth.

Using a checklist approach to simplify what you need to do and when to do it, The Divorce Hacker’s Guide outlines each step in the legal process from the decision to file through the final judgment. It addresses all the things you must consider in six key areas — legal, financial, career, children, home, and well-being — and breaks them down into manageable tasks so that nothing falls through the cracks and you aren’t overwhelmed. Look for these icons throughout the book:

Certain steps in the legal process are common to every divorce: filing and responding to the petition, preparing financial disclosures, engaging in settlement negotiations, and preparing the final judgment of dissolution. The book takes a chronological approach to working through these common legal tasks, but don’t hesitate to jump in wherever you are in the process. My goal, by dividing the book into clearly defined topics, is to help you easily customize the advice to serve your unique situation, so you find the information you need. For example, if you have kids, look for the children icon; if you don’t, skip those sections. Need to know what to do right now about your house? Look for the home icon in each chapter to answer your questions.

Successfully re-creating yourself through divorce requires more than just navigating the legal process. The Divorce Hacker’s Guide takes the guesswork out of such difficult questions as Should I, or can I, keep my house? When do I tell the kids about the divorce, and what do I tell them? and When should I get back to work, and how can I use my divorce to start a new career or launch a business?

Throughout, Insider Tips take the mystery out of divorce — for example, revealing the real reason your husband wants you to mediate and why he is suddenly insisting on spending more time with the kids. The Divorce Hacker’s Guide reveals the secrets some divorce professionals don’t want you to know — and how to avoid the traps that can cause your case to drag on so that they can keep billing you.

In conjunction with this book, check out the DivorceHacker app (available on my website, www.thedivorcehacker.com, and through Apple’s App Store), which is a handy tool that can guide you through the same steps as the book and that provides easy-to-use checklists when you’re on the go. In the app, select the icons that apply to your situation, and as you work through them, the app will show you where you are on track and where you need to focus more time and energy to reach your goals.

You can create the life you choose if you implement this program and follow these steps.

CHAPTER 1

Preparing to Get What You Need

A crisis is a gift, an opportunity, and perhaps a manifestation that life loves us, by beckoning us to go beyond the dance we presently perform.

— Leslie Lebeau

As soon as you learn that your marriage is in trouble, take some key steps to protect yourself. While you may be hoping that things will work out, there is simply no substitute for being prepared in the event that they don’t. Do not be lulled into complacency if you are working with a marriage counselor or clergy in an effort to save your marriage; don’t expect that things will somehow magically get better if you wait long enough for your husband to come around. While it’s fine to hope for the best, you need to prepare for the worst.

In the legal system, knowledge is power and money is key. Set aside money and gather information now, before you or your husband file for divorce, so that you are in the driver’s seat when it happens. Once the divorce is filed, everyone retreats to their separate corners, and it becomes much more difficult and costly to obtain the information and the money you need. The odds are high that, if your husband is anticipating divorce, he is already taking action to prevent you from accessing your money. I see this happen in virtually every divorce case I handle.

I had a client, Cecilia, who is a perfect case in point. Cecilia fell in love with Jeff, a handsome professional athlete, and they married when she was young. She became pregnant shortly after they married, and since Jeff traveled frequently with his team, she stayed home with first one baby, then two. When Jeff’s career as a player ended, he became a coach for a professional sports team in Los Angeles. He made good money, and their family had a great life. Cecilia didn’t have to work and devoted herself to raising the kids and enjoying the perks of being a coach’s wife.

But then came the signs and the alarm bells — which Cecilia chose to ignore. Even after Jeff left the home and was openly having an affair with another woman, Cecilia believed that everything would be fine and that Jeff would do the right thing. She remained in denial, hoping that Jeff would return to the family. Despite all the signs that her marriage was ending, Cecilia did nothing to prepare for the inevitable, until it all came to a screeching halt. One day, Cecilia and the kids arrived home from dinner while Jeff was traveling with the team. When they pulled into the garage, they found it empty. Their teenage son’s Jeep was gone. They frantically called the police. Only after the police located Jeff, driving the Jeep, did the family realize what had happened: Jeff had returned early from the trip, loaded the Jeep with his belongings, cleaned out the joint checking account, and taken off. When Cecilia arrived at my office, she had $238 in her bank account. Jeff had taken over $300,000 from the joint account and transferred it to a separate account of his own — so she couldn’t hire a lawyer.

In my work, Cecilia’s story is not an isolated incident. Inevitably, as I unwind each woman’s story, I find that financial infidelity often accompanies sexual infidelity. And virtually every woman is stunned to discover this. Don’t let this happen to you. Take the following steps now to protect yourself and your children, and do not be naïve. Your husband may have pledged to look out for your best interests financially and otherwise during your marriage, but when your marriage is in trouble, it is up to you to arm yourself with money and information so that you have an edge. These are the first steps to take control of your future.

DIVORCE HACKS

Get Money Wise

You will need funds to retain a lawyer and support yourself for several months until you can either negotiate support or obtain a court order. Take these steps to set aside the financial resources you need.

OPEN A BANK ACCOUNT IN YOUR NAME

Open this account at a different bank than the one where you and your husband share a joint account.

SET ASIDE MONEY FOR LIVING EXPENSES AND TO HIRE AN ATTORNEY

Did you know that you can take half the money out of your joint account and put it in a separate account in your own name if you live in one of the nine community-property states like California? You may not want to take out half the money all at once because it will alert your spouse to your intentions, and it may cause checks to bounce. At first, take out smaller amounts and put them in your new account, so that when the time comes, you can hire an attorney and cover your living costs for several months.

INSIDER TIP

In community-property states, assets earned and acquired during the marriage are split 50/50. There are nine community-property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

SECURE YOUR ASSETS

During a divorce, I’ve seen valuable wine collections disappear, coin collections go missing, and money evaporate. Do not be surprised when your husband tells the judge that he has no idea what happened to the silver coins your grandfather left you — and the judge shrugs and moves on. Take steps now to protect what is yours; remove or hide valuable items. It is much easier to return items you have removed in order to protect them than it is to locate items someone else has spirited away.

INSIDER TIP

Most states follow equitable distribution laws. In these states, property will be divided between the spouses in a fair and equitable manner. There is no set rule in determining who receives what or how much. The court considers a variety of factors. For example, the court may look at the relative earning contributions of the spouses, the value of one spouse staying at home or raising the children, and the earning potential of each. A spouse can receive between one-third and two-thirds of the marital property.

CHECK YOUR CREDIT SCORE

You need to build your own credit. Few numbers in life matter as much to your financial outlook and well-being as your credit score (known as the FICO score). A good credit score is crucial for financial success. It is one factor used by lenders to determine your creditworthiness for a mortgage, loan, or credit card. Your score can affect whether you are approved for credit and the interest rate you are charged. Prospective employers often check your credit score when you interview for a job. It is important to know what your credit score is and to improve it if it’s not in the good range.

The three major credit-reporting agencies are Equifax, Experian, and TransUnion. You need to check your score with each agency because your score may differ between them. This is because some lenders report to all three credit agencies, but others do not. Since your credit report can contain errors that adversely affect your score, you need to check all three to make certain that they are accurately reporting. Further, in 2017, Equifax suffered a major data breach, so if you have a credit report with them, check out the Federal Trade Commission’s website for what to do.

You can easily access your score online for free and track your credit-building progress on sites such as CreditKarma.com or AnnualCreditReport.com. A good credit score is generally considered to be 720 or higher. Lenders, however, have different standards for what they consider to be a good credit score, and so it is important to keep building your score to receive the most favorable interest rates and the highest rates of credit approval. Later, I’ll provide concrete tips for building your credit. For now, simply take the first step to find out what your credit score is.

OPEN TWO CREDIT CARDS IN YOUR OWN NAME

You need to be the primary cardholder on at least two credit cards, if possible. You can have a wallet full of credit cards, but if your husband is the primary cardholder and you are the secondary, he can cancel those cards without your permission. So get at least two cards in your name now, while you can use your combined credit score to get approved. Once you are divorced, it may be harder to get credit in your own name if you don’t have substantial income of your own.

Copy Financial Documents

When you meet with your attorney, he or she will ask for your financial documents. Save yourself time and money by collecting these documents now.

GATHER AND COPY ALL FINANCIAL DOCUMENTS, EVEN THOSE IN YOUR SPOUSE’S NAME

Copy anything with a dollar sign attached to it, such as bank accounts, investments, and retirement plans. Many women tell me their husband insists he is going to keep his 401K or pension. Wrong. If you live in a community-property state, half of any pension or retirement fund earned by your husband during the marriage is yours. If you live in an equitable property state, you are entitled to your fair share of his 401K or pension. Here is a checklist of documents your lawyer will want when you meet:

•Employment information: Paycheck stubs for you and your spouse for the last twelve months (or at least the last three months to the current date).

•Tax returns: Include the last three years of state and federal income tax returns.

•Pension and retirement programs: Copies of 401Ks, investment programs, stock, stock options, and bonds provided through the employer for you and/or your spouse.

•Insurance: Documents regarding insurance provided through the employer for you and/or your spouse.

•Real property: Deeds showing the legal description of any real property owned individually or jointly with your spouse, escrow papers from the time of purchase, current mortgage statements, current real property tax statements, homeowners or fire insurance policies on all real properties, and tax assessor’s statements.

•Stock portfolio: List of corporate stocks and/or stock certificates owned by you and your spouse, individually or jointly, and the name and address of stock broker(s).

•Cars, boats, trailers: Copies of pink and registration slips, encumbrance (what’s owed), and monthly payments.

•Life insurance: Current policies with statements of any loans against them.

•Promissory notes and/or deeds of trust: Copies of such records that name you and your spouse as beneficiaries.

•Credit cards and loans: Credit cards; creditor’s statements showing names, address, account numbers, and balances presently owed, plus creditor’s statements showing balances owed at separation date; financial statements of net worth prepared by you or your spouse to secure bank loans or for any other purpose; and any other information that will help establish your net worth individually or jointly, for you and your spouse.

•Household furniture and furnishings: Take pictures of significant items with your opinion of the estimated value. You may be asked to list those items that you wish to keep and those that you wish to give to your spouse.

•Bank or credit union accounts: Most recent statements showing balances, particularly at date of separation, held in individual or joint names, savings passbooks, and certificates of deposit.

•Wills or trusts

•Written agreements: Premarital written agreements with spouse.

INSIDER TIP

After filing for divorce, husbands often provide only a fraction of what they legally owe as a tactical maneuver to force their spouse to accept a settlement that is less than what she is legally entitled to. It can take time to retain counsel and get to court to obtain what you need. Take steps now to protect yourself.

IF YOUR SPOUSE OWNS A BUSINESS, COPY FINANCIAL INFORMATION ABOUT THE BUSINESS

You must prove your husband’s income to obtain support, and it is more difficult to establish cash flow for a spouse who is self-employed than one who receives a W-2. If your spouse is self-employed, he will probably understate his earnings and overstate his business expenses to decrease what he owes in spousal and child support. Before the divorce is filed, obtain whatever information you can about the business and its finances. Your lawyer will want the following:

•Corporate or partnership federal and state income tax returns for the past three years.

•Copies of recent financial statements prepared to apply for credit or business loans of any kind.

DOCUMENT YOUR MONTHLY BUDGET FOR HOUSEHOLD EXPENSES

Gather information on all household expenses, for you and your children, including mortgage/rent, property taxes, homeowner’s fees, car payment, insurance (home, car, medical, and life), utilities, personal expenditures, travel, education expenses, health care, and so on — everything, in other words, that you spend to maintain your standard of living on a monthly basis. This information will determine the amount of child and spousal support you will receive or pay. I recommend that for expenses that fluctuate (like the water and gas bill), you gather expenditures over the past twelve months and divide each category by twelve. It is important to include everything, since once support is ordered, getting it modified is costly and time-consuming, and can only be accomplished in certain circumstances. For example, if you do not include the expense for the children’s summer camps in your calculation before the divorce is final, you may have difficulty getting your ex-husband to share that expense after the divorce.

Know the Three Ways to Get Divorced

In order to get what you want in your divorce, it is imperative that you understand the different ways you can get divorced and select the best path for you. Understanding the pros and cons of each method will enable you to make an informed decision that will alleviate stress and save you time and money. There is a movement toward resolving divorce through mediation and collaboration, rather than litigation, which is generally a very good thing. However, if you take the mediation route, it is extremely important that you understand your rights, so that you get what